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Friday, May 24, 2024 | Back issues
Courthouse News Service Courthouse News Service

Mexico saw highest inflation for February in 22 years

Experts said that consumers can expect the trend to continue thanks to Russia's continuing invasion of Ukraine.

MEXICO CITY (CN) — Mexico saw the highest rate of inflation for the month of February in 22 years, according to the country’s national statistics agency Inegi.

Up from 3.76% in the same month of 2021, February’s 7.28% inflation was the highest the country had seen for the second month in the year since 2000.

Inflation fell slightly in December and January after reaching a two-decade high of 7.37% in November, but prices for everything from limes to eggs to natural gas rose again in February thanks primarily to supply chain disruptions resulting from the Covid-19 pandemic.

Consumers felt the pinch most severely in staple agricultural products like limes, onions and avocados, which saw prices rise by 167%, 112% and 83%, respectively.

But higher prices were seen in almost all sectors of Mexico’s economy, including services and energy, not just basic food items. 

Only 10 of the more than 400 goods and services on Inegi’s National Consumer Price Index saw negative annual variation rates from February 2021. These included market basket items like beans, rice and sugar, as well as potatoes and other dried legumes. 

Market vendors told Courthouse News that the higher prices were definitely affecting sales. Alfredo Pulido, a produce vendor at Mexico City’s Coyoacán market, had to raise the price he charges for limes by as much as 40%.

“People are buying fewer limes now. Those who used come and buy a kilo are now buying a quarter kilo, or even just four or five limes,” said Pulido. 

Across the aisle from him, Brenda Paredes said she now pays double what she used to pay for limes and avocados. She has had to pass this cost onto her customers, as well, and is worried about rising inflation.

"Even though these are basic food items, sales just aren't what they used to be," she said.

A scale at a fruit stand in Mexico City's wholesale foods market. Basic food items like limes, onions and avocados saw the highest price hikes in February 2022. (Cody Copeland/Courthouse News)

Gregorio Franco, who sells corn tortillas at the market, had to raise the price he charges per kilo from 15 pesos (72 cents) to 18 pesos (86 cents) when the inflation rate rose at the end of last year.

Luckily, he sells a product that people just can’t live without in Mexico. And with Covid-19 rates dropping, he has seen more customers in recent weeks.

“We're seeing more customers and sales are going up now that we’re in the green [of Mexico’s stoplight-based Covid-19 monitoring system],” said Franco. 

Café owner Maribel Santeliz is also seeing business return, despite having to raise the price she charges for a cup of coffee by around 7% at her market coffee stand Estanquillo Café. 

“It was hard to get by during the pandemic, because people weren’t coming in for coffee, but after two years, business is finally starting to come back,” said Santeliz.

But while eased Covid-19 restrictions may mean more customers in the markets, both vendors and consumers can expect to see prices move even higher in months to come, according to Gabriela Siller, head of economic analysis at the financial firm Banco Base.

“We unfortunately expect inflation to keep rising,” said Siller, who attributed the prediction to uncertainty caused by Russia’s continuing invasion of Ukraine.

“We don’t know how long the war will last, and therefore we don’t know what the full impact on the economy will be. It’s possible that in Mexico inflation will rise as high as 8% if the pressures we saw in the first two months of the year continue,” she said.

Mexico’s central bank Banxico is expected to raise interest rates in an attempt to curb the rising inflation, but vendors in the Coyoacán market aren’t getting their hopes up any time soon.

“I doubt it,” said Paredes, the produce vendor, after rolling her eyes when asked if she expected the government to help her situation. She and others here will continue to work hard and rely on their neighbors to get by as best they can.

“I’m not worried,” said fellow produce vendor Pulido. “We’re going to keep going and get through this. This is nothing.”

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Categories / Economy, International

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